Proposed law to nationalise South Africa’s Reserve Bank back in the spotlight

The EFF’s deputy president Floyd Shivambu has briefed parliament’s Finance Standing Committee on the party’s South African Reserve Bank Amendment bill on Tuesday evening (26 August).

Introduced by the EFF as a private member’s bill, the draft legislation proposes that all of the bank’s stakeholders are appointed by the government and are not private.

“In its current form, the South African Reserve Bank Act allows private individuals, including foreigners, to own shares of the South African shareholders based on the share capital of the bank,” said Shivambu.

“The private shareholders through acquired shares, in terms of the South African Reserve Bank Act, have some role to play in the governance of the South African Reserve Bank, including the election of the directors, and receive dividends from the bank’s profits.”

Shivambu said that the bill will:

  • Make the state the sole shareholder of the South African Reserve Bank;
  • Provide for the appointment of the board of directors, the tenure of the office of the appointed directors, and give the minister the power to make regulations related to the appointment of appointed directors;
  • Give the minister of finance the power to appoint auditors of the bank.

The EFF MP also raised legacy issues around the bank – including the “un-transformed” nature of the banking sector.

South Africa’s central bank is one of few in the world that’s still owned by private shareholders. While the bill is a ‘private members bill’, it aligns with the ruling ANC’s own position on nationalising the Reserve Bank.

This places the ruling party in a difficult position as ANC MPs would effectively dismiss their own internal resolutions if they choose to strike down the bill.

However, the parliamentary briefing did raise questions around the bill, specifically whether it will pass Constitutional muster in its current form.

While the ANC and the EFF could push for nationalisation, governor Lesetja Kganyago has indicated that the central bank has ‘stepped back’ from the debate.

“We have spelt out why we were opposed to that and, quite frankly, we think it is a distraction. But we have decided to step away from the debate,” he said.

Read: Nedbank earnings plummet as it warns of weak economic recovery in South Africa

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Proposed law to nationalise South Africa’s Reserve Bank back in the spotlight